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CASE STUDY

Commercial Bank Restructuring Of Real Estate Division

We received a call from a large international commercial bank that had grown its US presence primarily with lending to commercial real estate investors and developers. While they had done a small number of structured financings, their primary product lines were acquisition and construction financings.

After some preliminary discussions about ways to expand products and thereby increase their competitiveness while protecting against cyclicality of the real estate industry, Peters & Associates was retained to formulate a new organizational structure. Our efforts resulted in the expansion of their core business of real estate first mortgage debt origination to include CMBS, mezzanine and high yield capabilities as well as trading and portfolio management. We then recruited experienced professionals into each of these capabilities. Subsequently, we went on to identify additional investment opportunities that would further enable the bank to leverage its balance sheet and, with either wholly owned subsidiaries or off-balance sheet investments, buy or create de novo business units. This would serve to diversify their overall real estate opportunities so as to provide revenue streams that would endure through the potential cyclical industry changes. We identified several existing businesses as potential acquisition candidates, conceived several start-up businesses then recruited appropriate talent to run them.